Arc Resources (OTCMKTS:AETUF) and Paramount Resources (OTCMKTS:PRMRF) Financial Survey

Arc Resources (OTCMKTS:AETUF) and Paramount Resources (OTCMKTS:PRMRF) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Profitability

This table compares Arc Resources and Paramount Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arc Resources	30.77%	18.83%	11.47%
Paramount Resources	111.48%	6.89%	5.31%

Volatility and Risk

Arc Resources has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Paramount Resources has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.

Insider and Institutional Ownership

2.5% of Arc Resources shares are owned by institutional investors. Comparatively, 4.1% of Paramount Resources shares are owned by institutional investors. 0.3% of Arc Resources shares are owned by company insiders. Comparatively, 36.3% of Paramount Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Arc Resources and Paramount Resources, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arc Resources	0	0	3	1	3.25
Paramount Resources	0	2	0	1	2.67

Earnings & Valuation

This table compares Arc Resources and Paramount Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arc Resources	$2.98 billion	3.87	$820.37 million	$1.82	10.84
Paramount Resources	$1.28 billion	1.65	$245.14 million	$7.01	2.11

Arc Resources has higher revenue and earnings than Paramount Resources. Paramount Resources is trading at a lower price-to-earnings ratio than Arc Resources, indicating that it is currently the more affordable of the two stocks.

Dividends

Arc Resources pays an annual dividend of $0.56 per share and has a dividend yield of 2.8%. Paramount Resources pays an annual dividend of $0.44 per share and has a dividend yield of 3.0%. Arc Resources pays out 30.8% of its earnings in the form of a dividend. Paramount Resources pays out 6.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Paramount Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Arc Resources beats Paramount Resources on 8 of the 15 factors compared between the two stocks.

About Arc Resources

ARC Resources Ltd. engages in the acquiring and developing crude oil, natural gas, condensate, and natural gas liquids in Canada. It primarily holds interests in the Montney basin located in Alberta and northeast British Columbia. ARC Resources Ltd. was founded in 1996 and is based in Calgary, Canada.

About Paramount Resources

Paramount Resources Ltd. explores for and develops conventional and unconventional petroleum and natural gas reserves and resources in Canada. The company holds interests in the Karr and Wapiti Montney properties covering an area of 109,000 net acres located south of the city of Grande Prairie, Alberta; Kaybob North Duvernay development and natural gas producing properties covering an area of 124,000 net acres located in west-central Alberta; and Willesden Green Duvernay development in central Alberta and shale gas producing properties in the Horn River Basin in northeast British Columbia covering an area of 249,000 net acres. The company was founded in 1976 and is based in Calgary, Canada.